The Land Of Lincoln And ‘Empire’ Brings Back Film Tax Credits – Update

UPDATE, 3:51 PM: So, after the confusion of yesterday, it seems today that we finally have a coherent party line on the return of Illinois’ Film Tax Credit. Long story short — if you apply and you are approved, you will be paid, regardless of whether the state actually passes a budget or not. At least that’s what the state’s Department of Commerce & Economic Opportunity’s General Counsel Justin Heather told Illinois Film Office Director Christine Dudley on Thursday morning.

“The Illinois Tax Credit is a statutory program administered by the Department of Commerce and Economic Opportunity,” said an email from Dudley quoting Heather that has been circulating around the studios today. The clarification comes after concerns raised by uncertainties about the re-instituted tax credits pointed out by Deadline on November 11. “The accredited production certificate issued to approved applicants does not require appropriation authorization and obligates the state to pay the credit pursuant to the terms and conditions set forth in said statute and after internal and legal review of qualifying expenditures provided in the independent audit of the production.”

Gov. Bruce Rauner’s office said Wednesday when it lifted the tax credit deferral that credits would only be able to be claimed once a budget was passed in the politically gridlocked state. Sources reinforced that declaration. Now, after some political backlash, it turns out that’s not the case. Dudley’s email sought to sooth worried studios that the Prairie State not only is seeking productions and big, transformative blockbusters but that they and the networks can plan on getting their lucrative credits as promised.

PREVIOUS, NOV. 11 PM: According to the MPAA today, the home of Abraham Lincoln and shows like Empire and Chicago P.D. is about to be “opening the door to new and exciting productions” with the return of its shuttered tax credits program. Except it isn’t exactly — at least not yet.

Yes, Gov. Bruce Rauner’s office in the fiscally plagued state said today that it is re-instituting the lucrative Film Tax Credit because of “economically responsible compromises” with Democrats in Springfield. But, in what one industry source called a “confusing” announcement, the GOP governor also said that “film tax credits for new projects will still not be certified or able to be claimed until an FY16 budget is enacted.” He added, “These changes will allow the Administration to better recruit new investment to Illinois without impacting the budget.”

So the state has lifted its indefinite deferral enacted in June and now is taking applications for the up-to-30% tax credits Illinois offers on qualified expenditures there. However, while the state will honor the credit, nothing will be given out until a budget is passed in Illinois, a source close to the state Department of Commerce told Deadline. Productions in Illinois, like other states with film and TV tax credits, commonly have to wait until principal photography is finished or sometimes up to 18 months before it can submit its receipts to be paid out its allocated credit.

While Fox’s long-previously-approved Empire and NBC’s upcoming Chicago Med — which got a spinoff approval after the deferral was in place — look good, this latest move presents a degree of uncertainty for studios and networks considering bringing their projects to Illinois, at least on paper. If, in a year or more, Illinois finds itself in the unlikely place of not having passed a budget, then nobody’s getting nuthin’. On the other hand, an industry source says they have been unequivocally assured that productions will be paid out by the Prairie State whether or not there is a budget in place at the time. Now if this sounds like classic politics in the Land of Lincoln and Lucious Lyon, let’s remember that this is a state that has been handing out IOUs to state lottery winners the past few months.

Check out the full MPAA statement from today here:

“By recharging the film tax credit program, Governor Rauner is opening the door to new and exciting productions, which means scores of jobs and investment in Illinois businesses that supply goods and services to motion picture and television projects. On behalf of our member companies, we thank Governor Rauner for his leadership, and look forward to continuing to work together to ensure that Illinois’ long legacy of hosting film and TV productions grows even stronger.”